MENGNIU DAIRY(02319) 西南证券·2024-04-02 16:00Investment Rating - The report maintains a "Buy" rating for Mengniu Dairy (2319.HK) with a target price of HKD 21.62, based on a current price of HKD 17.32 [1]. Core Views - Mengniu Dairy reported a revenue of RMB 98.62 billion for 2023, representing a year-on-year growth of 6.5%, and an operating profit of RMB 6.17 billion, up 13.8% year-on-year. The company declared a final dividend of RMB 0.489 per share, with a payout ratio of 40% for the year [2]. - The liquid milk segment showed steady growth, with revenue of RMB 82.1 billion (+4.9%), while ice cream and cheese segments saw significant increases in revenue, with cheese revenue soaring by 230% due to the consolidation of Miaokelando [2]. - The decline in raw milk prices has improved profit margins, with a gross margin of 37.2%, up 1.9 percentage points year-on-year. The operating profit margin increased to 6.3%, a rise of 0.4 percentage points [2]. - The new president, Gao Fei, is expected to lead the company towards continued improvement in profitability, supported by a favorable raw milk price environment and product structure optimization [2]. Summary by Sections Financial Performance - In 2023, Mengniu Dairy achieved a total revenue of RMB 98.62 billion, with a growth rate of 6.5%. The net profit attributable to shareholders was RMB 4.81 billion, reflecting a decline of 9.31% year-on-year. The earnings per share (EPS) for 2023 was RMB 1.22 [3][11]. - Forecasts for 2024-2026 predict net profits of RMB 5.50 billion, RMB 6.00 billion, and RMB 6.52 billion, respectively, with corresponding EPS of RMB 1.40, RMB 1.53, and RMB 1.66 [2][3]. Segment Analysis - Liquid Milk: Revenue is expected to grow at rates of 4%, 3%, and 2.8% from 2024 to 2026, driven by market share expansion and product optimization [7]. - Ice Cream: Anticipated revenue growth rates of 15%, 13%, and 10% from 2024 to 2026, supported by new consumption scenarios and innovative products [7]. - Cheese: Revenue growth is projected at 18%, 15%, and 12% for the same period, with Miaokelando maintaining a leading market share [7]. Valuation and Investment Recommendation - The report suggests a dynamic PE of 14 times for 2024, leading to a target price of HKD 21.62, maintaining the "Buy" rating based on expected improvements in operating profit margins [2][8].